TRANSPORTATION CODE


TITLE 6. ROADWAYS


SUBTITLE B. STATE HIGHWAY SYSTEM


CHAPTER 222. FUNDING AND FEDERAL AID


SUBCHAPTER A. GENERAL PROVISIONS


Sec. 222.001. USE OF STATE HIGHWAY FUND. (a) Money that is required to be used for public roadways by the Texas Constitution or federal law and that is deposited in the state treasury to the credit of the state highway fund, including money deposited to the credit of the state highway fund under Title 23, United States Code, may be used only:

(1) to improve the state highway system;

(2) to mitigate adverse environmental effects that result directly from construction or maintenance of a state highway by the department; or

(3) by the Department of Public Safety to police the state highway system and to administer state laws relating to traffic and safety on public roads.

(b) Notwithstanding Section 222.103, the department may not pledge or otherwise encumber money deposited in the state highway fund to:

(1) guarantee a loan obtained by a public or private entity for costs associated with a toll facility of the public or private entity; or

(2) insure bonds issued by a public or private entity for costs associated with a toll facility of the public or private entity.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 771 (S.B. 883), Sec. 1, eff. June 19, 2009.

Sec. 222.002. USE OF STATE HIGHWAY FUND FOR DEPARTMENT FUNCTIONS. Money in the state highway fund that is not required to be spent for public roadways by the Texas Constitution or federal law may be used for any function performed by the department.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 222.003. ISSUANCE OF BONDS SECURED BY STATE HIGHWAY FUND. (a) The commission may issue bonds and other public securities secured by a pledge of and payable from revenue deposited to the credit of the state highway fund.

(b) The aggregate principal amount of the bonds and other public securities that are issued may not exceed $6 billion. The commission may only issue bonds or other public securities in an aggregate principal amount of not more than $1.5 billion each year.

(c) Proceeds from the sale of bonds and other public securities issued under this section shall be used to fund state highway improvement projects.

(d) Of the aggregate principal amount of bonds and other public securities that may be issued under this section, the commission shall issue bonds or other public securities in an aggregate principal amount of $1.2 billion to fund projects that reduce accidents or correct or improve hazardous locations on the state highway system. The commission by rule shall prescribe criteria for selecting projects eligible for funding under this section. In establishing criteria for the projects, the commission shall consider accident data, traffic volume, pavement geometry, and other conditions that can create or exacerbate hazardous roadway conditions.

(e) The proceeds of bonds and other public securities issued under this section may not be used for any purpose other than any costs related to the bonds and other public securities and the purposes for which revenues are dedicated under Section 7-a, Article VIII, Texas Constitution.

(f) The commission may enter into credit agreements, as defined by Chapter 1371, Government Code, relating to the bonds and other public securities authorized by this section. The agreements may be secured by and payable from the same sources as the bonds and other public securities.

(g) All laws affecting the issuance of bonds and other public securities by governmental entities, including Chapters 1201, 1202, 1204, 1207, 1231, and 1371, Government Code, apply to the issuing of bonds and other public securities and the entering into of credit agreements under this section.

(h) The proceeds of bonds and other public securities issued under this section may be used to:

(1) finance other funds relating to the public security, including debt service reserve and contingency; and

(2) pay the cost or expense of the issuance of the public security.

(i) Bonds and other public securities and credit agreements authorized by this section may not have a principal amount or terms that, at the time the bonds or other public securities are issued or the agreements entered into, are expected by the commission to cause annual expenditures with respect to the obligations to exceed 10 percent of the amount deposited to the credit of the state highway fund in the immediately preceding year.

(j) Bonds and other public securities issued under this section may be sold in such manner and subject to such terms and provisions as set forth in the order authorizing their issuance, and such bonds and other public securities must mature not later than 20 years after their dates of issuance, subject to any refundings or renewals.

(k) The comptroller shall withdraw from the state highway fund and forward at the direction of the commission to another person the amounts as determined by the commission to permit timely payment of:

(1) the principal of and interest on the bonds and other public securities that mature or become due; and

(2) any cost related to the bonds and other public securities that become due, including payments under credit agreements.

Added by Acts 2003, 78th Leg., ch. 1325, Sec. 5.01, eff. Sept. 13, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 264 (S.B. 792), Sec. 14.01, eff. June 11, 2007.

Acts 2011, 82nd Leg., R.S., Ch. 259 (H.B. 1201), Sec. 6, eff. June 17, 2011.

Text of section effective on approval by the voters of S.J.R. 1, 83rd Leg., 3rd C.S.


For expiration of this section, see Subsection (d).


Sec. 222.0031. REQUIRED REPAYMENT OF BONDS. (a) On or before August 31, 2015, the department shall identify and implement savings and efficiencies that result in a total savings of at least $100 million in funds appropriated to the department for the state fiscal biennium ending August 31, 2015. The amount saved is appropriated for the state fiscal biennium ending August 31, 2015, to the department from the source from which the money was originally appropriated for the purpose of reducing the principal of and interest on bonds and other public securities issued, and bond enhancement agreements entered into, by the commission as authorized by Section 49-n, Article III, Texas Constitution, as proposed by H.J.R. 28, 78th Legislature, Regular Session, 2003.

(b) To make payments required under Subsection (a), the department:

(1) shall maximize the use of all amounts appropriated to the department;

(2) may use savings realized through operational efficiencies, cost reductions, and cost savings; and

(3) may not reduce the amount of funding available for transportation projects.

(c) Not later than August 31, 2015, the department shall report in writing to the legislature on the implementation of this section.

(d) This section expires September 1, 2015.

Added by Acts 2013, 83rd Leg., 3rd C.S., Ch. 1, Sec. 2.

Sec. 222.004. ISSUANCE OF GENERAL OBLIGATION BONDS FOR HIGHWAY IMPROVEMENT PROJECTS. (a) In this section:

(1) "Bonds" means bonds, notes, and other public securities.

(2) "Credit agreement" has the meaning assigned by Section 1371.001, Government Code.

(3) "Improvement" includes acquisition of the highway, construction, reconstruction, and major maintenance, including any necessary design, and the acquisition of rights-of-way.

(b) The commission by order or resolution may issue general obligation bonds for the purposes provided in this section. The aggregate principal amount of the bonds that are issued may not exceed the amount specified by Section 49-p(a), Article III, Texas Constitution.

(c) The commission may enter into credit agreements relating to the bonds. A credit agreement entered into under this section may be secured by and payable from the same sources as the bonds.

(d) The bonds shall be executed in the form, on the terms, and in the denominations, bear interest, and be issued in installments as prescribed by the commission, and must mature not later than 30 years after their dates of issuance, subject to any refundings or renewals. The bonds may be issued in multiple series and issues from time to time and may have the provisions the commission determines appropriate and in the interest of the state.

(e) The commission has all powers necessary or appropriate to carry out this section and to implement Section 49-p, Article III, Texas Constitution, including the powers granted to other bond-issuing governmental agencies and units and to nonprofit corporations by Chapters 1201, 1207, and 1371, Government Code.

(f) The bonds and the record of proceedings authorizing the bonds and any related credit agreements shall be submitted to the attorney general for approval as to their legality. If the attorney general finds that they will be issued in accordance with this section and other applicable law, the attorney general shall approve them and deliver them to the comptroller for registration. After approval by the attorney general, registration by the comptroller, and payment by the purchasers of the bonds in accordance with the terms of sale and after execution and delivery of the related credit agreements, the bonds and related credit agreements are incontestable for any cause.

(g) Bonds may be issued for one or more of the following purposes:

(1) to pay all or part of the costs of highway improvement projects; and

(2) to pay:

(A) the costs of administering projects authorized under this section;

(B) the cost or expense of the issuance of the bonds; or

(C) all or part of a payment owed or to be owed under a credit agreement.

(h) The proceeds from the issuance and sale of the bonds may not be expended or used for the purposes authorized under this section unless those proceeds have been appropriated by the legislature.

(i) The comptroller shall pay the principal of the bonds as they mature and the interest as it becomes payable and shall pay any cost related to the bonds that becomes due, including payments under credit agreements.

Added by Acts 2009, 81st Leg., 1st C.S., Ch. 1 (H.B. 1), Sec. 1, eff. July 10, 2009.

Sec. 222.005. AUTHORIZATION TO PROVIDE ASSISTANCE TO EXPEDITE ENVIRONMENTAL REVIEW. (a) The department, a county, a regional tollway authority operating under Chapter 366, or a regional mobility authority operating under Chapter 370 may enter into an agreement to provide funds to a state or federal agency to expedite the agency's performance of its duties related to the environmental review process for the applicable entity's transportation projects, including those listed in the applicable metropolitan planning organization's long-range transportation plan under 23 U.S.C. Section 134.

(b) Except as provided by Subsection (c), an agreement entered into under this section:

(1) may specify transportation projects the applicable entity considers to be priorities for review; and

(2) must require the agency receiving money to complete the environmental review in less time than is customary for the completion of environmental review by that agency.

(c) The department may enter into a separate agreement for a transportation project that the department determines has regional importance.

(d) An agreement entered into under this section does not diminish or modify the rights of the public regarding review and comment on transportation projects.

(e) An entity entering into an agreement under this section shall make the agreement available on the entity's Internet website.

Added by Acts 2011, 82nd Leg., R.S., Ch. 943 (H.B. 630), Sec. 3, eff. September 1, 2011.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1060 (S.B. 548), Sec. 3, eff. June 17, 2011.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1345 (S.B. 1420), Sec. 27, eff. September 1, 2011.

Sec. 222.006. ENVIRONMENTAL REVIEW CERTIFICATION PROCESS. The department by rule shall establish a process to certify department district environmental specialists to work on all documents related to state and federal environmental review processes. The certification process must:

(1) be available to department employees; and

(2) require continuing education for recertification.

Added by Acts 2011, 82nd Leg., R.S., Ch. 943 (H.B. 630), Sec. 3, eff. September 1, 2011.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1060 (S.B. 548), Sec. 3, eff. September 1, 2011.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1345 (S.B. 1420), Sec. 27, eff. September 1, 2011.

SUBCHAPTER B. FEDERAL AID


Sec. 222.031. USE OF FEDERAL AID FOR ROAD CONSTRUCTION. Money appropriated by the United States for public road construction in this state may be spent only by and under the supervision of the department.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 30.12, eff. Sept. 1, 1997.

Sec. 222.032. USE OF FEDERAL AID FOR TOLL BRIDGE CONSTRUCTION. (a) The department may:

(1) cooperate with the United States Secretary of Transportation in the construction of a toll bridge under 23 U.S.C. Section 129;

(2) spend state highway funds for the purpose described in Subdivision (1);

(3) impose tolls in accordance with 23 U.S.C. Section 129; and

(4) take other necessary or proper action to give effect to the purpose and intent of this section.

(b) The department shall impose tolls in accordance with this section with the goal that the tolls be eliminated, as contemplated or required by 23 U.S.C. Section 129.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 222.033. INTERSTATE TOLL BRIDGES. (a) Section 222.032 applies to a bridge over a stream forming the boundary of this state and an adjoining state.

(b) If the bridge is constructed jointly by this state and the adjoining state, the commission may cooperate with the appropriate authorities of the adjoining state in imposing tolls in accordance with this section.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 222.034. DISTRIBUTION OF FEDERAL FUNDS. (a) Federal aid for transportation purposes that is administered by the commission shall be distributed to the various parts of the state for a funding cycle through the selection of highway projects in the state in a manner that is consistent with federal formulas that determine the amount of federal aid for transportation purposes received by the state. A distribution under this subsection does not include deductions made for the state infrastructure bank or other federal funds reallocated by the federal government.

(b) The commission may vary from the distribution procedure provided by Subsection (a) if it issues a ruling or minute order identifying the variance and providing a particular justification for the variance.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.17, eff. Sept. 1, 1997.

See Subsec. (b) for effective date information.


Sec. 222.035. PRIVATE ACTIVITY BONDS. (a) In this section, "private activity bond" has the meaning assigned by Section 141(a), Internal Revenue Code of 1986.

(b) If the attorney general makes a determination that the United States Congress has enacted legislation amending the Internal Revenue Code of 1986 to include highway facilities or surface freight transfer facilities among the types of facilities for which private activity bonds may be used:

(1) the determination shall be published in the Texas Register; and

(2) Subsections (d), (e), (f), and (g) take effect on the 30th day after the date on which the attorney general's determination is published in the Texas Register.

(c) The attorney general shall monitor federal legislation for purposes of this section.

(d) The department shall establish and administer a program for private activity bonds issued for highway facilities or surface freight transfer facilities in this state.

(e) The program, at a minimum, must include a process by which the department and the Bond Review Board receive and evaluate applications for issuance of private activity bonds for highway facilities or surface freight transfer facilities.

(f) The department shall adopt rules to administer the program established under this section.

(g) To the extent that private activity bonds for highway facilities or surface freight transfer facilities are subject to the state ceiling under Section 146, Internal Revenue Code of 1986, the issuance of bonds for those facilities is governed by Chapter 1372, Government Code.

Added by Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.16, eff. June 14, 2005.

SUBCHAPTER C. FUNDING FROM OTHER POLITICAL SUBDIVISIONS


Sec. 222.051. LOCAL FINANCING AND REIMBURSEMENT. (a) A governmental unit that has the authority to build roads may finance the construction of an approved project for the state highway system.

(b) If funds become available, the department may contract to reimburse the governmental unit that provided financing for the project.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 222.052. LOCAL CONTRIBUTIONS. (a) The governing body of a political subdivision of this state may contribute funds to be spent by the commission in the development and construction of the public roads and state highway system within the political subdivision.

(b) The commission may accept a contribution made under Subsection (a).

(c) In this section, "political subdivision" includes a county or a political subdivision of a county.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 222.053. RELIEF FROM LOCAL MATCHING FUNDS REQUIREMENT. (a) In this section, "economically disadvantaged county" means a county that has, in comparison to other counties in the state:

(1) below average per capita taxable property value;

(2) below average per capita income; and

(3) above average unemployment.

(b) Except as provided by Subsection (c), the commission may require, request, or accept from a political subdivision matching or other local funds, rights-of-way, utility adjustments, additional participation, planning, documents, or any other local incentives to make the most efficient use of its highway funding.

(c) In evaluating a proposal to construct, maintain, or extend a highway or for another type of highway project in a political subdivision that consists of all or a portion of an economically disadvantaged county, the commission:

(1) may not consider the absence or value of local incentives provided under Subsection (b) or the value of a benefit received by the state in an agreement under Section 791.031, Government Code, beyond the minimum required local matching funds; and

(2) shall adjust the minimum local matching funds requirement after evaluating the political subdivision's effort and ability to meet the requirement.

(d) In making an adjustment under Subsection (c)(2), the commission may use its in-kind resources and any other available resources to help satisfy a federal requirement.

(e) The commission shall report annually to the governor, the lieutenant governor, and the speaker of the house of representatives on the use of matching funds and local incentives and the ability of the commission to ensure that political subdivisions located in economically disadvantaged counties have equal ability to compete for highway funding with political subdivisions in counties that are not economically disadvantaged.

(f) The commission shall certify a county as an economically disadvantaged county on an annual basis as soon as possible after the comptroller reports on the economic indicators listed under Subsection (a). A county certified under this section is eligible for an adjustment under Subsection (c)(2).

(g) The commission shall determine whether to make an adjustment under Subsection (c)(2) at the time a political subdivision that consists of all or a portion of an economically disadvantaged county submits a proposal to construct, maintain, or extend a highway or for another type of highway project.

(h) The commission may delegate any of its duties or powers under this section to the director or the director's designee.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.18, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 545 (H.B. 1107), Sec. 1, eff. September 1, 2005.

Acts 2005, 79th Leg., Ch. 809 (S.B. 573), Sec. 2, eff. September 1, 2005.

SUBCHAPTER D. STATE INFRASTRUCTURE BANK


Sec. 222.071. DEFINITIONS. In this subchapter:

(1) "Bank" means the state infrastructure bank account.

(2) "Construction" has the meaning assigned by 23 U.S.C. Section 101.

(3) "Federal act" means Section 350 of the National Highway System Designation Act of 1995 (Pub. L. No. 104-59).

(4) "Federal-aid highway" has the meaning assigned by 23 U.S.C. Section 101.

(5) "Qualified project" includes:

(A) the construction of a federal-aid highway;

(B) a transit project under 49 U.S.C. Sections 5307, 5309, and 5311; or

(C) for the expenditure of secondary funds, a project eligible for assistance under Title 23 or Title 49, United States Code.

(6) "Secondary funds" includes:

(A) the repayment of a loan or other assistance that is provided with money deposited to the credit of the bank; and

(B) investment income generated by secondary funds deposited to the credit of the bank.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997.

Sec. 222.072. STATE INFRASTRUCTURE BANK. (a) The state infrastructure bank is an account in the state highway fund. The bank is administered by the commission.

(b) Federal funds received by the state under the federal act, matching state funds in an amount required by that act, proceeds from bonds issued under Section 222.075, secondary funds, other state funds deposited into the bank by order of the commission, and other money received by the state that is eligible for deposit in the bank may be deposited into the bank and used only for the purposes described in this subchapter.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 1267 (H.B. 2134), Sec. 1, eff. June 18, 2005.

Sec. 222.073. PURPOSES OF INFRASTRUCTURE BANK. Notwithstanding Section 222.001, the commission shall use money deposited in the bank to:

(1) encourage public and private investment in transportation facilities both within and outside of the state highway system, including facilities that contribute to the multimodal and intermodal transportation capabilities of the state; and

(2) develop financing techniques designed to:

(A) expand the availability of funding for transportation projects and to reduce direct state costs;

(B) maximize private and local participation in financing projects; and

(C) improve the efficiency of the state transportation system.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 1267 (H.B. 2134), Sec. 2, eff. June 18, 2005.

Sec. 222.074. FORM OF ASSISTANCE. (a) To further a purpose described by Section 222.073, the commission may use money deposited to the credit of the bank to provide financial assistance to a public or private entity for a qualified project to:

(1) extend credit by direct loan;

(2) provide credit enhancements;

(3) serve as a capital reserve for bond or debt instrument financing;

(4) subsidize interest rates;

(5) insure the issuance of a letter of credit or credit instrument;

(6) finance a purchase or lease agreement in connection with a transit project;

(7) provide security for bonds and other debt instruments; or

(8) provide methods of leveraging money that have been approved by the United States secretary of transportation and relate to the project for which the assistance is provided.

(b) Financial assistance to a private entity under Subsection (a) shall be limited to a qualified project that:

(1) provides transportation services or facilities that provide a demonstrated public benefit; or

(2) is constructed or operated in cooperation with a state agency or political subdivision in accordance with an agreement between that agency or political subdivision and the private entity.

(c) Financial assistance to a public or private entity under Subsection (a) shall be limited, as applicable, to a qualified project that is consistent with the transportation plan developed by the metropolitan planning organization.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 1267 (H.B. 2134), Sec. 3, eff. June 18, 2005.

Sec. 222.0745. INCURRENCE OF DEBT BY PUBLIC ENTITY. (a) A public entity in this state, including a municipality, county, district, authority, agency, department, board, or commission, that is authorized by law to construct, maintain, or finance a qualified project may borrow money from the bank, including by direct loan, based on the credit of the public entity.

(b) Money borrowed under this section must be segregated from other funds under the control of the public entity and may only be used for purposes related to a qualified project.

(c) The authority granted by this section does not affect the ability of a public entity to incur debt using other statutorily authorized methods.

Added by Acts 2001, 77th Leg., ch. 4, Sec. 1, eff. April 9, 2001.

Sec. 222.075. REVENUE BONDS. (a) The commission may issue revenue bonds for the purpose of providing money for the bank.

(b) Except as provided by Subsection (c), the commission may issue revenue bonds or revenue refunding bonds under this section without complying with any other law applicable to the issuance of bonds.

(c) Notwithstanding any other provision of this section, the following laws apply to bonds issued by the commission:

(1) Chapters 1201, 1202, 1204, 1231, and 1371, Government Code; and

(2) Subchapters A-C, Chapter 1207, Government Code.

(d) The revenue bonds are special obligations of the commission payable only from income and receipts of the bank as the commission may designate. The income and receipts include principal of and interest paid and to be paid on acquired obligations, other designated obligations held by the bank, or income from accounts created within the bank.

(e) The revenue bonds do not constitute a debt of the state or a pledge of the faith and credit of the state.

(f) The commission may require participants to make charges, levy taxes, or otherwise provide for sufficient money to pay acquired obligations.

(g) Revenue bonds issued under this section shall be authorized by order of the commission and shall have the form and characteristics and bear the designations as are provided in the order.

(h) Revenue bonds shall:

(1) be dated;

(2) bear interest at the rate or rates authorized by law;

(3) mature at the time or times, serially, as term, revenue bonds, or otherwise not more than 50 years after their dates;

(4) be called before stated maturity on the terms and at the prices, be in the denominations, be in the form, either coupon or registered, carry registration privileges as to principal only or as to both principal and interest and as to successive exchange of coupon for registered bonds or one denomination for bonds of other denominations, and successive exchange of registered revenue bonds for coupon revenue bonds, be executed in the manner, and be payable at the place or places inside or outside the state, as provided in the order;

(5) be issued in temporary or permanent form;

(6) be issued in one or more installments and from time to time as required and sold at a price or prices and under terms determined by the commission to be the most advantageous reasonably obtainable; and

(7) be issued on a parity with and be secured in the manner as other revenue bonds authorized to be issued by this section or be issued without parity and secured differently from other revenue bonds.

(i) All proceedings relating to the issuance of revenue bonds issued under this section shall be submitted to the attorney general for examination. On determining that the revenue bonds have been authorized in accordance with law, the attorney general shall approve the revenue bonds, and the revenue bonds shall be registered by the comptroller. After the approval and registration, the revenue bonds are incontestable in any court or other forum for any reason and are valid and binding obligations in accordance with their terms for all purposes.

(j) The proceeds received from the sale of revenue bonds shall be deposited in the bank and invested in the manner provided for other funds deposited under this subchapter.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.373, eff. Sept. 1, 2001.

Sec. 222.076. SEPARATE SUBACCOUNTS. (a) The bank shall consist of at least two separate subaccounts, a highway subaccount and a transit subaccount.

(b) In addition to the subaccounts under Subsection (a), the commission may create one or more subaccounts that are capitalized with state funds only. Subaccounts capitalized with state funds only are not subject to the federal act.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 1267 (H.B. 2134), Sec. 4, eff. June 18, 2005.

Sec. 222.077. REPAYMENT TERMS; DEPOSIT OF REPAYMENTS; INVESTMENT INCOME. (a) Any funds disbursed through the state infrastructure bank must be repaid on terms determined by the commission. The terms must comply with the federal act except for terms applicable to funds deposited in a subaccount described by Section 222.076(b).

(b) Notwithstanding any other law to the contrary:

(1) the repayment of a loan or other assistance provided with money deposited to the credit of a subaccount in the bank shall be deposited in that subaccount; and

(2) investment income generated by money deposited to the credit of a subaccount in the bank shall be:

(A) credited to that subaccount;

(B) available for use in providing financial assistance under this subchapter; and

(C) invested in United States Treasury securities, bank deposits, or other financing instruments approved by the United States secretary of transportation to earn interest and enhance the financing of projects assisted by the bank.

(c) The commission shall administer the bank in compliance with applicable requirements of the federal act and any applicable federal regulation or guideline.

(d) The commission by rule shall:

(1) implement this subchapter; and

(2) establish eligibility criteria for an entity applying for financial assistance from the bank.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.21, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 1267 (H.B. 2134), Sec. 5, eff. June 18, 2005.

SUBCHAPTER E. TOLL FACILITIES


Sec. 222.1001. DEFINITION. In this subchapter, "transportation project" has the meaning assigned by Section 370.003.

Added by Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 1, eff. September 1, 2013.

Sec. 222.101. EXPENDITURE OF MONEY. The department may spend money from any source for the construction, maintenance, and operation of toll facilities.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.01, eff. Sept. 1, 1997.

Sec. 222.103. COST PARTICIPATION. (a) The department may participate, by spending money from any available source, in the cost of the acquisition, construction, maintenance, or operation of a toll facility of a public or private entity on terms and conditions established by the commission. The commission:

(1) may require the repayment of any money spent by the department for the cost of a toll facility of a public entity; and

(2) shall require the repayment of any money spent by the department for the cost of a toll facility of a private entity.

(b) Money repaid as required by the commission shall be deposited to the credit of the fund from which the expenditure was made. Money deposited as required by this section is exempt from the application of Section 403.095, Government Code.

(c) A bond or other debt obligation issued by a public or private entity to finance the cost of a toll facility in which the department participates is an obligation of the issuing entity and is not an obligation of this state.

(d) On the request of a member of the legislature, the department shall provide the member a status report on all highway construction projects, by legislative district, that are under contract or awaiting funding. The report shall include projects that would be funded in any manner by state, federal, or toll funds.

(e) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 1312, Sec. 99(31), eff. September 1, 2013.

(f) This section applies to any participation by the department in the cost of a project under Chapter 284, 361, or 366.

(g) The commission shall adopt rules to implement Subsection (a).

(h) Money granted by the department each fiscal year under this section may not exceed an amount that, together with the money granted for the preceding four fiscal years, results in an average annual expenditure of $2 billion. This limitation does not apply to money required to be repaid.

(i), (j) Repealed by Acts 2003, 78th Leg., ch. 312, Sec. 77; Acts 2003, 78th Leg., ch. 1325, Sec. 15.74.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 7.01, eff. Sept. 1, 1997. Amended by Acts 2001, 77th Leg., ch. 1237, Sec. 1, eff. Nov. 6, 2001; Acts 2003, 78th Leg., ch. 312, Sec. 77, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 1325, Sec. 15.74, 19.02, eff. June 21, 2003.

Amended by:

Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.17, eff. June 14, 2005.

Acts 2013, 83rd Leg., R.S., Ch. 1312 (S.B. 59), Sec. 99(31), eff. September 1, 2013.

Sec. 222.104. PASS-THROUGH TOLLS. (a) In this section, "pass-through toll" means a per vehicle fee or a per vehicle mile fee that is determined by the number of vehicles using a highway.

(b) The department may enter into an agreement with a public or private entity that provides for the payment of pass-through tolls to the public or private entity as reimbursement for the design, development, financing, construction, maintenance, or operation of a toll or nontoll facility on the state highway system by the public or private entity.

(c) The department may enter into an agreement with a private entity that provides for the payment of pass-through tolls to the department as reimbursement for the department's design, development, financing, construction, maintenance, or operation of a toll or nontoll facility on the state highway system that is financed by the department.

(d) The department and a regional mobility authority, a regional tollway authority, or a county acting under Chapter 284 may enter into an agreement that provides for:

(1) the payment of pass-through tolls to the authority or county as compensation for the payment of all or a portion of the costs of maintaining a state highway or a portion of a state highway transferred to the authority or county after being converted to a toll facility that the department estimates it would have incurred if the highway had not been converted; or

(2) the payment by the authority or county of pass-through tolls to the department as reimbursement for all or a portion of the costs incurred by the department to design, develop, finance, construct, and maintain a state highway or a portion of a state highway transferred to the authority or county after being converted to a toll facility.

(d-1) Expired.

(e) The department may use any available funds for the purpose of making a pass-through toll payment under this section except funds derived from the issuance of bonds under Section 201.943.

Text of Subsec. (f) as added by Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.18


(f) A regional mobility authority, a regional tollway authority, or a county acting under Chapter 284 is authorized to secure and pay its obligations under an agreement under this section from any lawfully available funds.

(f) Repealed by Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 15.002, eff. September 1, 2007.

Text of Subsec. (g) as added by Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.18


(g) The commission may adopt rules necessary to implement this section. Rules adopted under this subsection may include criteria for:

(1) determining the amount of pass-through tolls to be paid under this section; and

(2) allocating the risk that traffic volume will be higher or lower than the parties to an agreement under this section anticipated in entering the agreement.

(g) Repealed by Acts 2007, 80th Leg., R.S., Ch. 921, Sec. 15.002, eff. September 1, 2007.

Text of Subsec. (h) as added by Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.18


(h) Money repaid to the department under this section shall be deposited to the credit of the fund from which the money was originally provided and is exempt from the application of Section 403.095, Government Code.

Text of Subsec. (h) as added by Acts 2005, 79th Leg., Ch. 994 (H.B. 2139), Sec. 1


(h) An agreement under this section should prescribe the roles and responsibilities of the parties and establish time frames for any department reviews or approvals in a manner that will, to the maximum extent possible, expedite the development of the project.

(i) To the maximum extent permitted by law, the department may delegate the full responsibility for design, bidding, and construction, including oversight and inspection, to a municipality, county, regional mobility authority, or regional tollway authority with which the department enters into an agreement under this section.

(j) An agreement under this section must provide that the municipality, county, regional mobility authority, or regional tollway authority is required to meet state design criteria, construction specifications, and contract administration procedures unless the department grants an exception.

(k) An agreement under this section must prescribe the roles and responsibilities of the parties and establish time frames for any department reviews or approvals in a manner that will, to the maximum extent possible, expedite the development of the project.

Added by Acts 2003, 78th Leg., ch. 1325, Sec. 6.01, eff. June 21, 2003.

Amended by:

Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.18, eff. June 14, 2005.

Acts 2005, 79th Leg., Ch. 994 (H.B. 2139), Sec. 1, eff. June 18, 2005.

Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 15.002, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch. 1320 (S.B. 1266), Sec. 1, eff. September 1, 2007.

Text of section as added by Acts 2005, 79th Leg., R.S., Ch. 281 (H.B. 2702), Sec. 2.19


For text of section as added by Acts 2005, 79th Leg., R.S., Ch. 994 (H.B. 2139), Sec. 2, see other Sec. 222.1045.


Sec. 222.1045. CONTRACTS OF CERTAIN PUBLIC ENTITIES. (a) In this section, "public entity" means a municipality, county, regional mobility authority, or regional tollway authority.

(b) A public entity may contract with a private entity to act as the public entity's agent in:

(1) the design, financing, maintenance, operation, or construction, including oversight and inspection, of a toll or nontoll facility under Section 222.104(b); or

(2) the maintenance of a state highway or a portion of a state highway subject to an agreement under Section 222.104(d)(1).

(c) A public entity shall:

(1) select a private entity under Subsection (b) on the basis of the private entity's qualifications and experience; and

(2) enter into a project development agreement with the private entity.

(d) A private entity selected shall comply with Chapter 1001, Occupations Code, and all laws related to procuring engineering services and construction bidding that are applicable to the public entity that selected the private entity.

(e) A public entity may assign the public entity's right to payment of pass-through tolls under Section 222.104(b) or (d)(1) to the private entity.

Added by Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.19, eff. June 14, 2005.

Text of section as added by Acts 2005, 79th Leg., R.S., Ch. 994 (H.B. 2139), Sec. 2


For text of section as added by Acts 2005, 79th Leg., R.S., Ch. 281 (H.B. 2702), Sec. 2.19, see other Sec. 222.1045.


Sec. 222.1045. CONTRACTS OF CERTAIN PUBLIC ENTITIES. (a) In this section, "public entity" means a municipality, county, regional mobility authority, or a regional tollway authority.

(b) A public entity may contract with a private entity to act as the public entity's agent in:

(1) the design, financing, maintenance, operation, or construction, including oversight and inspection, of a toll or nontoll facility under Section 222.104(b); or

(2) the maintenance of a state highway or a portion of a state highway converted to a toll facility under Section 222.104(c).

(c) A public entity shall:

(1) select a private entity under Subsection (b) on the basis of the private entity's qualifications and experience; and

(2) enter into a project development agreement with the private entity.

(d) A private entity selected shall comply with Chapter 1001, Occupations Code, and all laws related to procuring engineering services and construction bidding that are applicable to the public entity that selected the private entity.

(e) A public entity may assign the public entity's right to payment of pass-through tolls under Section 222.104(b) or (c) to the private entity.

Added by Acts 2005, 79th Leg., Ch. 994 (H.B. 2139), Sec. 2, eff. June 18, 2005.

Sec. 222.105. PURPOSES. The purposes of Sections 222.106 and 222.107 are to:

(1) promote public safety;

(2) facilitate the improvement, development, or redevelopment of property;

(3) facilitate the movement of traffic; and

(4) enhance a local entity's ability to sponsor a transportation project.

Added by Acts 2007, 80th Leg., R.S., Ch. 1320 (S.B. 1266), Sec. 2, eff. September 1, 2007.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 1, eff. September 1, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 2, eff. September 1, 2013.

Sec. 222.106. MUNICIPAL TRANSPORTATION REINVESTMENT ZONES. (a) In this section:

(1) the amount of a municipality's tax increment for a year is the amount of ad valorem taxes levied and collected by the municipality for that year on the captured appraised value of real property taxable by the municipality and located in a transportation reinvestment zone under this section;

(2) the captured appraised value of real property taxable by a municipality for a year is the total appraised value of all real property taxable by the municipality and located in a transportation reinvestment zone for that year less the tax increment base of the municipality; and

(3) the tax increment base of a municipality is the total appraised value of all real property taxable by the municipality and located in a transportation reinvestment zone for the year in which the zone was designated under this section.

(b) This section applies only to a municipality in which a transportation project is to be developed under Section 222.104 or 222.108.

(c) If the governing body determines an area to be unproductive and underdeveloped and that action under this section will further the purposes stated in Section 222.105, the governing body of the municipality by ordinance may designate a contiguous geographic area in the jurisdiction of the municipality to be a transportation reinvestment zone to promote one or more transportation projects.

(d) The governing body must comply with all applicable laws in the application of this chapter.

(e) Not later than the 30th day before the date the governing body of the municipality proposes to adopt an ordinance designating an area as a transportation reinvestment zone under this section, the governing body must hold a public hearing on the designation of the zone and its benefits to the municipality and to property in the proposed zone. At the hearing an interested person may speak for or against the creation of the zone or its boundaries. Not later than the seventh day before the date of the hearing, notice of the hearing and the intent to create the zone must be published in a newspaper having general circulation in the municipality.

(f) Compliance with the requirements of this section constitutes designation of an area as a transportation reinvestment zone without further hearings or other procedural requirements.

(g) The ordinance designating an area as a transportation reinvestment zone must:

(1) describe the boundaries of the zone with sufficient definiteness to identify with ordinary and reasonable certainty the territory included in the zone;

(2) provide that the zone takes effect immediately on passage of the ordinance and that the base year shall be the year of passage of the ordinance or some year in the future;

(3) assign a name to the zone for identification, with the first zone designated by a municipality designated as "Transportation Reinvestment Zone Number One, (City or Town, as applicable) of (name of municipality)," and subsequently designated zones assigned names in the same form, numbered consecutively in the order of their designation;

(4) designate the base year for purposes of establishing the tax increment base of the municipality;

(5) establish a tax increment account for the zone; and

(6) contain findings that promotion of the transportation project or projects will cultivate the improvement, development, or redevelopment of the zone.

(h) From taxes collected on property in a zone, the municipality shall pay into the tax increment account for the zone the tax increment produced by the municipality, less any amount allocated under previous agreements, including agreements under Chapter 380, Local Government Code, or Chapter 311, Tax Code.

(i) All or the portion specified by the municipality of the money deposited to a tax increment account must be used to fund the transportation project or projects for which the zone was designated, as well as aesthetic improvements within the zone. Any remaining money deposited to the tax increment account may be used for other purposes as determined by the municipality. A municipality may issue bonds to pay all or part of the cost of a transportation project and may pledge and assign all or a specified amount of money in the tax increment account to secure repayment of those bonds.

(i-1) The governing body of a municipality may contract with a public or private entity to develop, redevelop, or improve a transportation project in a transportation reinvestment zone and may pledge and assign all or a specified amount of money in the tax increment account to that entity. After a pledge or assignment is made, the governing body of the municipality may not rescind its pledge or assignment until the contractual commitments that are the subject of the pledge or assignment have been satisfied.

(i-2) To accommodate changes in the limits of a project for which a reinvestment zone was designated, the boundaries of a zone may be amended at any time, except that property may not be removed or excluded from a designated zone if any part of the tax increment account has been assigned or pledged directly by the municipality or through another entity to secure bonds or other obligations issued to obtain funding or development of a project, and property may not be added to a designated zone unless the governing body of the municipality complies with Subsections (e) and (g).

(j) Except as provided by Subsections (i-1) and (k), a transportation reinvestment zone terminates on December 31 of the year in which the municipality completes:

(1) all contractual requirements that included the pledge or assignment of all or a portion of money deposited to a tax increment account; or

(2) the repayment of money owed under an agreement for development, redevelopment, or improvement of the project or projects for which the zone was designated.

(k) A transportation reinvestment zone terminates on December 31 of the 10th year after the year the zone was designated, if before that date the municipality has not entered into a contract described in Subsection (i-1) or otherwise not used the zone for the purpose for which it was designated.

(l) Any surplus remaining in a tax increment account on termination of a zone may be used for other purposes as determined by the municipality.

Added by Acts 2007, 80th Leg., R.S., Ch. 1320 (S.B. 1266), Sec. 2, eff. September 1, 2007.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 2, eff. September 1, 2011.

Acts 2011, 82nd Leg., R.S., Ch. 1345 (S.B. 1420), Sec. 28, eff. September 1, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 3, eff. September 1, 2013.

Sec. 222.107. COUNTY TRANSPORTATION REINVESTMENT ZONES. (a) In this section:

(1) the amount of a county's tax increment for a year is the amount of ad valorem taxes levied and collected by the county for that year on the captured appraised value of real property taxable by the county and located in a transportation reinvestment zone under this section;

(2) the captured appraised value of real property taxable by a county for a year is the total appraised value of all real property taxable by the county and located in a transportation reinvestment zone for that year less the tax increment base of the county; and

(3) the tax increment base of a county is the total appraised value of all real property taxable by the county and located in a transportation reinvestment zone for the year in which the zone was designated under this section.

(b) This section applies only to a county in which a transportation project is to be developed under Section 222.104 or 222.108.

(c) The commissioners court of the county, after determining that an area is unproductive and underdeveloped and that action under this section would further the purposes described by Section 222.105, by order or resolution may designate a contiguous geographic area in the jurisdiction of the county to be a transportation reinvestment zone to promote one or more transportation projects.

(d) The commissioners court must comply with all applicable laws in the application of this chapter.

(e) Not later than the 30th day before the date the commissioners court proposes to designate an area as a transportation reinvestment zone under this section, the commissioners court must hold a public hearing on the creation of the zone, its benefits to the county and to property in the proposed zone, and the possible abatement of ad valorem taxes or the grant of other relief from ad valorem taxes imposed by the county on real property located in the zone. At the hearing an interested person may speak for or against the designation of the zone, its boundaries, or the possible abatement of or the relief from county taxes on real property in the zone. Not later than the seventh day before the date of the hearing, notice of the hearing and the intent to create a zone must be published in a newspaper having general circulation in the county.

(f) The order or resolution designating an area as a transportation reinvestment zone must:

(1) describe the boundaries of the zone with sufficient definiteness to identify with ordinary and reasonable certainty the territory included in the zone;

(2) provide that the zone takes effect immediately on adoption of the order or resolution and that the base year shall be the year of passage of the order or resolution or some year in the future;

(3) assign a name to the zone for identification, with the first zone designated by a county designated as "Transportation Reinvestment Zone Number One, County of (name of county)," and subsequently designated zones assigned names in the same form numbered consecutively in the order of their designation;

(4) designate the base year for purposes of establishing the tax increment base of the county;

(5) establish an ad valorem tax increment account for the zone; and

(6) contain findings that promotion of the transportation project or projects will cultivate the improvement, development, or redevelopment of the zone.

(g) Compliance with the requirements of this section constitutes designation of an area as a transportation reinvestment zone without further hearings or other procedural requirements.

(h) The commissioners court may:

(1) from taxes collected on property in a zone, pay into a tax increment account for the zone an amount equal to the tax increment produced by the county less any amounts allocated under previous agreements, including agreements under Section 381.004, Local Government Code, or Chapter 312, Tax Code;

(2) by order or resolution enter into an agreement with the owner of any real property located in the transportation reinvestment zone to abate all or a portion of the ad valorem taxes or to grant other relief from the taxes imposed by the county on the owner's property in an amount not to exceed the amount calculated under Subsection (a)(1) for that year;

(3) by order or resolution elect to abate all or a portion of the ad valorem taxes imposed by the county on all real property in a zone; or

(4) grant other relief from ad valorem taxes on property in a zone.

(h-1) All abatements or other relief granted by the commissioners court in a transportation reinvestment zone must be equal in rate. In any ad valorem tax year, the total amount of the taxes abated or the total amount of relief granted under this section may not exceed the amount calculated under Subsection (a)(1) for that year, less any amounts allocated under previous agreements, including agreements under Chapter 381, Local Government Code, or Chapter 312, Tax Code.

(h-2) To further the development of the transportation project or projects for which the transportation reinvestment zone was designated, a county may assess all or part of the cost of the transportation project or projects against property within the zone. The assessment against each property in the zone may be levied and payable in installments in the same manner as provided by Sections 372.016-372.018, Local Government Code, provided that the installments do not exceed the total amount of the tax abatement or other relief granted under Subsection (h). The county may elect to adopt and apply the provisions of Sections 372.015-372.020 and 372.023, Local Government Code, to the assessment of costs and Sections 372.024-372.030, Local Government Code, to the issuance of bonds by the county to pay the cost of a transportation project. The commissioners court of the county may contract with a public or private entity to develop, redevelop, or improve a transportation project in the transportation reinvestment zone, including aesthetic improvements, and may pledge and assign to that entity all or a specified amount of the revenue the county receives from the tax increment or the installment payments of the assessments for the payment of the costs of that transportation project. After a pledge or assignment is made, the commissioners court of the county may not rescind its pledge or assignment until the contractual commitments that are the subject of the pledge or assignment have been satisfied. Any amount received from the tax increment or the installment payments of the assessments not pledged or assigned in connection with a transportation project may be used for other purposes as determined by the commissioners court.

(i) In the alternative, to assist the county in developing a transportation project, if authorized by the commission under Chapter 441, a road utility district may be formed under that chapter that has the same boundaries as a transportation reinvestment zone created under this section.

(i-1) Repealed by Acts 2013, 83rd Leg., R.S., Ch. 114, Sec. 11, eff. September 1, 2013.

(j) In any ad valorem tax year, a road utility district formed as provided by Subsection (i) may impose taxes on property in the district at a rate that when applied to the property in the district would impose taxes in an amount equal to the amount of taxes abated by the commissioners court of the county under Subsection (h). Notwithstanding Section 441.192(a), an election is not required to approve the imposition of the taxes.

(k) A road utility district formed as provided by Subsection (i) may enter into an agreement to fund development of a project or to repay funds owed to the department. Any amount paid for this purpose is considered to be an operating expense of the district. Any taxes collected by the district that are not paid for this purpose may be used for any district purpose.

(k-1) To accommodate changes in the limits of a project for which a reinvestment zone was designated, the boundaries of a zone may be amended at any time, except that property may not be removed or excluded from a designated zone if any part of the tax increment or assessment has been assigned or pledged directly by the county or through another entity to secure bonds or other obligations issued to obtain funding or development of a project, and property may not be added to a designated zone unless the commissioners court of the county complies with Subsections (e) and (f).

(l) Except as provided by Subsection (m), a transportation reinvestment zone, a tax abatement agreement entered into under Subsection (h), or an order or resolution on the abatement of taxes or the grant of relief from taxes under that subsection terminates on December 31 of the year in which the county completes:

(1) all contractual requirements that included the pledge or assignment of all or a portion of:

(A) money deposited to a tax increment account; or

(B) the assessments collected under this section; or

(2) the repayment of money owed under an agreement for the development, redevelopment, or improvement of the project or projects for which the zone was designated.

(m) A transportation reinvestment zone terminates on December 31 of the 10th year after the year the zone was designated, if before that date the county has not used the zone for the purpose for which it was designated.

Added by Acts 2007, 80th Leg., R.S., Ch. 1320 (S.B. 1266), Sec. 2, eff. September 1, 2007.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 3, eff. September 1, 2011.

Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 4, eff. September 1, 2011.

Acts 2011, 82nd Leg., R.S., Ch. 1345 (S.B. 1420), Sec. 29, eff. September 1, 2011.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 4, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 5, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 6, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 7, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 11, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 20.001(a), eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 20.001(b), eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 22.001(43), eff. September 1, 2013.

Sec. 222.1071. COUNTY ENERGY TRANSPORTATION REINVESTMENT ZONES. (a) A county shall determine the amount of the tax increment for a county energy transportation reinvestment zone in the same manner the county would determine the tax increment as provided in Section 222.107(a) for a county transportation reinvestment zone.

(b) A county, after determining that an area is affected because of oil and gas exploration and production activities and would benefit from funding under Chapter 256, by order or resolution of the commissioners court:

(1) may designate a contiguous geographic area in the jurisdiction of the county to be a county energy transportation reinvestment zone to promote one or more transportation infrastructure projects, as that term is defined by Section 256.101, located in the zone; and

(2) may jointly administer a county energy transportation reinvestment zone with a contiguous county energy transportation reinvestment zone formed by another county.

(c) A commissioners court must:

(1) dedicate or pledge all of the captured appraised value of real property located in the county energy transportation reinvestment zone to transportation infrastructure projects; and

(2) comply with all applicable laws in the application of this chapter.

(d) Not later than the 30th day before the date a commissioners court proposes to designate an area as a county energy transportation reinvestment zone under this section, the commissioners court must hold a public hearing on the creation of the zone and its benefits to the county and to property in the proposed zone. At the hearing an interested person may speak for or against the designation of the zone, its boundaries, the joint administration of a zone in another county, or the use of tax increment paid into the tax increment account.

(e) Not later than the seventh day before the date of the hearing, notice of the hearing and the intent to create a zone must be published in a newspaper having general circulation in the county.

(f) The order or resolution designating an area as a county energy transportation reinvestment zone must:

(1) describe the boundaries of the zone with sufficient definiteness to identify with ordinary and reasonable certainty the territory included in the zone;

(2) provide that the zone takes effect immediately on adoption of the order or resolution designating an area and that the base year shall be the year of passage of the order or resolution designating an area or some year in the future;

(3) establish an ad valorem tax increment account for the zone or provide for the establishment of a joint ad valorem tax increment account, if applicable; and

(4) if two or more counties are designating a zone for the same transportation infrastructure project or projects, include a finding that:

(A) the project or projects will benefit the property and residents located in the zone;

(B) the creation of the zone will serve a public purpose of the county; and

(C) details the transportation infrastructure projects for which each county is responsible.

(g) Compliance with the requirements of this section constitutes designation of an area as a county energy transportation reinvestment zone without further hearings or other procedural requirements.

(h) The county may, from taxes collected on property in a zone, pay into a tax increment account for the zone or zones an amount equal to the tax increment produced by the county less any amounts allocated under previous agreements, including agreements under Section 381.004, Local Government Code, or Chapter 312, Tax Code.

(i) The county may:

(1) use money in the tax increment account to provide:

(A) matching funds under Section 256.105; and

(B) funding for one or more transportation infrastructure projects located in the zone;

(2) apply for grants under Subchapter C, Chapter 256, subject to Section 222.1072;

(3) use five percent of any grant distributed to the county under Subchapter C, Chapter 256, for the administration of a county energy transportation reinvestment zone, not to exceed $250,000;

(4) enter into an agreement to provide for the joint administration of county energy transportation reinvestment zones if the commissioners court of the county has designated a county energy transportation reinvestment zone under this section for the same transportation infrastructure project or projects as another county commissioners court; and

(5) pledge money in the tax increment account to a road utility district formed as provided by Subsection (n).

(j) Tax increment paid into a tax increment account may not be pledged as security for bonded indebtedness.

(k) A county energy transportation reinvestment zone terminates on December 31 of the 10th year after the year the zone was designated unless extended by an act of the county commissioners court that designated the zone. The extension may not exceed five years. On termination of the zone, any money remaining in the tax increment account must be transferred to the road and bridge fund described by Chapter 256 for the county that deposited the money into the tax increment account.

(l) The captured appraised value of real property located in a county energy transportation reinvestment zone shall be treated as provided by Section 26.03, Tax Code.

(m) The commissioners court of a county may enter into an agreement with the department to designate a county energy transportation reinvestment zone under this section for a specified transportation infrastructure project involving a state highway located in the proposed zone.

(n) In the alternative, to assist the county in developing a transportation infrastructure project, if authorized by the commission under Chapter 441, a road utility district may be formed under that chapter that has the same boundaries as a county energy transportation reinvestment zone created under this section. The road utility district may issue bonds to pay all or part of the cost of a transportation infrastructure project and may pledge and assign all or a specified amount of money in the tax increment account to secure those bonds if the county:

(1) collects a tax increment; and

(2) pledges all or a specified amount of the tax increment to the road utility district.

(o) A road utility district formed as provided by Subsection (n) may enter into an agreement to fund development of a transportation infrastructure project or to repay funds owed to the department. Any amount paid for this purpose is considered to be an operating expense of the district. Any taxes collected by the district that are not paid for this purpose may be used for any district purpose.

Added by Acts 2013, 83rd Leg., R.S., Ch. 1372 (S.B. 1747), Sec. 2, eff. September 1, 2013.

Sec. 222.1072. ADVISORY BOARD OF COUNTY ENERGY TRANSPORTATION REINVESTMENT ZONE. (a) A county is eligible to apply for a grant under Subchapter C, Chapter 256, if the county creates an advisory board to advise the county on the establishment, administration, and expenditures of a county energy transportation reinvestment zone. The county commissioners court shall determine the terms and duties of the advisory board members.

(b) Except as provided by Subsection (c), the advisory board of a county energy transportation reinvestment zone consists of the following members appointed by the county judge and approved by the county commissioners court:

(1) up to three oil and gas company representatives who perform company activities in the county and are local taxpayers; and

(2) two public members.

(c) County energy transportation reinvestment zones that are jointly administered are advised by a single joint advisory board for the zones. A joint advisory board under this subsection consists of members appointed under Subsection (b) for each zone to be jointly administered.

(d) An advisory board member may not receive compensation for service on the board or reimbursement for expenses incurred in performing services as a member.

Added by Acts 2013, 83rd Leg., R.S., Ch. 1372 (S.B. 1747), Sec. 2, eff. September 1, 2013.

Sec. 222.1075. PORT AUTHORITY TRANSPORTATION REINVESTMENT ZONE. (a) In this section:

(1) "Port authority" means a port authority or navigation district created or operating under Section 52, Article III, or Section 59, Article XVI, Texas Constitution.

(2) "Port commission" means the governing body of a port authority or navigation district.

(3) "Port project" means a project that is necessary or convenient for the proper operation of a maritime port or waterway and that will improve the security, movement, and intermodal transportation of cargo or passengers in commerce and trade, including dredging, disposal, and other projects.

(b) In this section:

(1) the amount of a port authority's tax increment for a year is the amount of ad valorem taxes levied and collected by the port authority or by the commissioners court on behalf of the port authority for that year on the captured appraised value of real property taxable by the port authority and located in a transportation reinvestment zone under this section;

(2) the captured appraised value of real property taxable by a port authority for a year is the total appraised value of all real property taxable by the port authority and located in a transportation reinvestment zone for that year less the tax increment base of the port authority; and

(3) the tax increment base of a port authority is the total appraised value of all real property taxable by the port authority and located in a transportation reinvestment zone for the year in which the zone was designated under this section.

(c) The port commission of the port authority, after determining that an area is unproductive or underdeveloped and that action under this section would improve the security, movement, and intermodal transportation of cargo or passengers in commerce and trade, by order or resolution may designate a contiguous geographic area in the jurisdiction of the port authority to be a transportation reinvestment zone to promote a port project and for the purpose of abating ad valorem taxes or granting other relief from taxes imposed by the county on real property located in the zone.

(d) The port commission must comply with all applicable laws in the application of this chapter.

(e) Not later than the 30th day before the date the port commission proposes to designate an area as a transportation reinvestment zone under this section, the port commission must hold a public hearing on the creation of the zone, its benefits to the port authority and to property in the proposed zone, and the abatement of ad valorem taxes or the grant of other relief from ad valorem taxes imposed by the port authority on real property located in the zone. At the hearing an interested person may speak for or against the designation of the zone, its boundaries, or the abatement of or other relief from port authority taxes on real property in the zone. Not later than the seventh day before the date of the hearing, notice of the hearing and the intent to create a zone must be published in a newspaper having general circulation in the county in which the zone is proposed to be located.

(f) The order or resolution designating an area as a transportation reinvestment zone must:

(1) describe the boundaries of the zone with sufficient definiteness to identify with ordinary and reasonable certainty the territory included in the zone;

(2) provide that the zone takes effect immediately on adoption of the order or resolution and that the base year shall be the year of passage of the order or resolution or some year in the future;

(3) assign a name to the zone for identification, with the first zone designated by a county designated as "Transportation Reinvestment Zone Number One, (name of port authority)," and subsequently designated zones assigned names in the same form numbered consecutively in the order of their designation;

(4) designate the base year for purposes of establishing the tax increment base of the port authority;

(5) establish an ad valorem tax increment account for the zone; and

(6) contain findings that promotion of a port project will improve the security, movement, and intermodal transportation of cargo or passengers in commerce and trade.

(g) Compliance with the requirements of this section constitutes designation of an area as a transportation reinvestment zone without further hearings or other procedural requirements.

(h) The port commission may:

(1) from taxes collected on property in a zone, including maintenance and operation taxes, pay into a tax increment account for the zone an amount equal to the tax increment produced by the port authority less any amounts allocated under previous agreements, including agreements under Chapter 312, Tax Code;

(2) from a tax increment account for the zone, repay any loan or other debt incurred to finance a port project under this section;

(3) by order or resolution enter into an agreement with the owner of any real property located in the transportation reinvestment zone to abate all or a portion of the ad valorem taxes or to grant other relief from the taxes imposed by the port authority on the owner's property in an amount not to exceed the amount calculated under Subsection (b)(1) for that year;

(4) by order or resolution elect to abate all or a portion of the ad valorem taxes imposed by the port authority on all real property in a zone; or

(5) grant other relief from ad valorem taxes on property in a zone.

(i) All abatements or other relief granted by the port commission in a transportation reinvestment zone must be equal in rate. In any ad valorem tax year, the total amount of the taxes abated or the total amount of other relief granted under this section may not exceed the amount calculated under Subsection (b)(1) for that year, less any amounts allocated under previous agreements, including agreements under Chapter 312, Tax Code.

(j) To further the development of the port project for which the transportation reinvestment zone was designated, a port authority may assess all or part of the cost of the port project against property within the zone. The assessment against each property in the zone may be levied and payable in installments in the same manner as provided for municipal and county public improvement districts under Sections 372.016-372.018, Local Government Code, provided that the installments do not exceed the total amount of the tax abatement or other relief granted under Subsection (h). The port authority has the powers provided to municipalities and counties under Sections 372.015-372.020 and 372.023, Local Government Code, for the assessment of costs and Sections 372.024-372.030, Local Government Code, for the issuance of bonds by the port authority to pay the cost of a port project. The port commission of the port authority may contract with a public or private entity to develop, redevelop, or improve a port project in the transportation reinvestment zone, including aesthetic improvements, and may pledge and assign to that entity all or a specified amount of the revenue the port authority receives from installment payments of the assessments for the payment of the costs of that port project. After a pledge or assignment is made, if the entity that received the pledge or assignment has itself pledged or assigned that amount to secure bonds or other obligations issued to obtain funding for the port project, the port commission of the port authority may not rescind its pledge or assignment until the bonds or other obligations secured by the pledge or assignment have been paid or discharged. Any amount received from installment payments of the assessments not pledged or assigned in connection with the port project may be used for other purposes associated with the port project or in the zone.

(k) To accommodate changes in the limits of the project for which a reinvestment zone was designated, the boundaries of a zone may be amended at any time, except that property may not be removed or excluded from a designated zone if any part of the assessment has been assigned or pledged directly by the port authority or through another entity to secure bonds or other obligations issued to obtain funding of the project, and property may not be added to a designated zone unless the port commission of the port authority complies with Subsections (e) and (f).

(l) Except as provided by Subsection (m), a tax abatement agreement entered into under Subsection (h), or an order or resolution on the abatement of taxes or the grant of other relief from taxes under that subsection, terminates on December 31 of the year in which the port authority completes any contractual requirement that included the pledge or assignment of assessments collected under this section.

(m) A transportation reinvestment zone terminates on December 31 of the 10th year after the year the zone was designated, if before that date the port authority has not used the zone for the purpose for which it was designated.

Added by Acts 2013, 83rd Leg., R.S., Ch. 1182 (S.B. 971), Sec. 1, eff. September 1, 2013.

Sec. 222.108. TRANSPORTATION REINVESTMENT ZONES FOR OTHER TRANSPORTATION PROJECTS. (a) A municipality or county may establish a transportation reinvestment zone for one or more transportation projects. If all or part of a transportation project is subject to oversight by the department, at the option of the governing body of the municipality or county, the department, to the extent permitted by law, shall delegate full responsibility for the development, design, letting of bids, and construction of the project, including project inspection, to the municipality or county. After assuming responsibility for a project under this subsection, a municipality or county shall enter into an agreement with the department that prescribes:

(1) the development process;

(2) the roles and responsibilities of the parties; and

(3) the timelines for any required reviews or approvals.

(b) Any portion of a transportation project developed under Subsection (a) that is on the state highway system or is located in the state highway right-of-way must comply with applicable state and federal requirements and criteria for project development, design, and construction, unless the department grants an exception to the municipality or county.

(c) The development, design, and construction plans and specifications for the portions of a project described by Subsection (b) must be reviewed and approved by the department under the agreement entered into under Subsection (a).

Without reference to the amendment of this subsection, this subsection was repealed by Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 11, eff. September 1, 2013.


(d) In this section, "transportation project" includes:

(1) transportation projects described by Section 370.003; and

(2) port security, transportation, or facility projects described by Section 55.001(5).

Added by Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 5, eff. September 1, 2011.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 8, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 11, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 1182 (S.B. 971), Sec. 2, eff. September 1, 2013.

Sec. 222.109. REDUCTION PROHIBITED. (a) A municipality or county may not be penalized with a reduction in traditional transportation funding because of the designation and use of a transportation reinvestment zone under this chapter. Any funding from the department committed to a project before the date that a transportation reinvestment zone is designated may not be reduced because the transportation reinvestment zone is designated in connection with that project.

(b) The department may not reduce any allocation of traditional transportation funding to any of its districts because a district contains a municipality or county that contains a transportation reinvestment zone designated under this chapter.

Added by Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 5, eff. September 1, 2011.

Sec. 222.110. SALES TAX INCREMENT. (a) In this section:

(1) "Sales tax base" for a transportation reinvestment zone means the amount of sales and use taxes imposed by a municipality under Section 321.101(a), Tax Code, or by a county under Chapter 323, Tax Code, as applicable, attributable to the zone for the year in which the zone was designated under this chapter.

(2) "Transportation reinvestment zone" includes a county energy transportation reinvestment zone.

(b) The governing body of a municipality or county may determine, in an ordinance or order designating an area as a transportation reinvestment zone or in an ordinance or order adopted subsequent to the designation of a zone, the portion or amount of tax increment generated from the sales and use taxes imposed by a municipality under Section 321.101(a), Tax Code, or by a county under Chapter 323, Tax Code, attributable to the zone, above the sales tax base, to be used as provided by Subsection (e). Nothing in this section requires a municipality or county to contribute sales tax increment under this subsection.

(c) A county that designates a portion or amount of sales tax increment under Subsection (b) must establish a tax increment account. A municipality or county shall deposit the designated portion or amount of tax increment under Subsection (b) to the entity's respective tax increment account.

(d) Before pledging or otherwise committing money in the tax increment account under Subsection (c), the governing body of a municipality or county may enter into an agreement, under Subchapter E, Chapter 271, Local Government Code, to authorize and direct the comptroller to:

(1) withhold from any payment to which the municipality or county may be entitled the amount of the payment into the tax increment account under Subsection (b);

(2) deposit that amount into the tax increment account; and

(3) continue withholding and making additional payments into the tax increment account until an amount sufficient to satisfy the amount due has been met.

Text of subsection as amended by Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 9


(e) The sales and use taxes to be deposited into the tax increment account under this section may be disbursed from the account only to:

(1) pay for projects authorized under Section 222.104 or 222.108; and

(2) notwithstanding Sections 321.506 and 323.505, Tax Code, satisfy claims of holders of tax increment bonds, notes, or other obligations issued or incurred for projects authorized under Section 222.104 or 222.108.

Text of subsection as amended by Acts 2013, 83rd Leg., R.S., Ch. 1134 (H.B. 2300), Sec. 2


(e) The sales and use taxes to be deposited into the tax increment account under this section may be disbursed from the account only to:

(1) pay for projects authorized under Section 222.104, including the repayment of amounts owed under an agreement entered into under that section; and

(2) notwithstanding Sections 321.506 and 323.505, Tax Code, satisfy claims of holders of tax increment bonds, notes, or other obligations issued or incurred for projects authorized under Section 222.104 or 222.1071.

(f) The amount deposited by a county to a tax increment account under this section is not considered to be sales and use tax revenue for the purpose of property tax reduction and computation of the county tax rate under Section 26.041, Tax Code.

(g) Not later than the 30th day before the date the governing body of a municipality or county proposes to designate a portion or amount of sales tax increment under Subsection (b), the governing body shall hold a public hearing on the designation of the sales tax increment. At the hearing an interested person may speak for or against the designation of the sales tax increment. Not later than the seventh day before the date of the hearing, notice of the hearing must be published in a newspaper having general circulation in the county or municipality, as appropriate.

(h) The hearing required under Subsection (g) may be held in conjunction with a hearing held under Section 222.106(e), 222.107(e), or 222.1071(d) if the ordinance or order designating an area as a transportation reinvestment zone under Section 222.106, 222.107, or 222.1071 also designates a sales tax increment under Subsection (b).

(i) Notwithstanding Subsection (e), the sales and use taxes to be deposited into the tax increment account established by a county energy transportation reinvestment zone or zones under this section may be disbursed from the account only to provide:

(1) matching funds under Section 256.105; and

(2) funding for one or more transportation infrastructure projects located in a zone.

Added by Acts 2011, 82nd Leg., R.S., Ch. 475 (H.B. 563), Sec. 5, eff. September 1, 2011.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 9, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 1134 (H.B. 2300), Sec. 2, eff. September 1, 2013.

Acts 2013, 83rd Leg., R.S., Ch. 1372 (S.B. 1747), Sec. 3, eff. September 1, 2013.

Sec. 222.111. TRANSPORTATION REINVESTMENT ZONES FOR PROJECTS LOCATED IN OTHER JURISDICTIONS. Notwithstanding any other law, the governing body of a county or municipality may designate a transportation reinvestment zone for a transportation project located outside the boundaries of the county or municipality if:

(1) the county or municipality finds that:

(A) the project will benefit the property and residents located in the zone; and

(B) the creation of the zone will serve a public purpose of that county or municipality;

(2) a zone has been designated for the same project by one or more counties or municipalities in whose boundaries the project is located; and

(3) an agreement for joint support of the designated zones is entered into under this section by:

(A) the county or municipality whose boundaries do not contain the project; and

(B) one or more of the counties or municipalities that have designated a zone for the project and in whose boundaries the project is located.

Added by Acts 2013, 83rd Leg., R.S., Ch. 114 (S.B. 1110), Sec. 10, eff. September 1, 2013.